Traders work on the floor of the New York Stock Exchange.
NYSE
Stock futures fell in trading overnight Sunday as investors assessed the outlook for further Covid-19 relief stimuli.
The Dow Jones industrial average futures fell 60 points. S&P 500 futures traded 0.2% lower and Nasdaq 100 declined 0.1%.
The stock market is approaching a tough week to begin in 2021 as investors looked past a violent siege of the Capitol and focused on the prospect of further fiscal stimulus following the Democratic sweep of the Transportation. The S&P 500 climbed for four days straight to a record with a 1.8% gain last week. The Dow and Nasdaq Composite tech-heavy gained 1.6% and 2.4% in the previous week, respectively, also reaching record highs.
“Progress is built on three key pillars: strong physical employment, high motivation, and vaccine hope,” Adam Crisafulli of Vital Knowledge said in a note on Sunday. “Incentive expectations are rising high – Biden’s plan may be worth several trillion dollars on paper, but its deliverables may be much smaller.”
President Joe Biden on Friday promised an encouraging economic release, which he said will be “in the trillions of dollars.” Further details will follow in a formal notice on Thursday, six days before he is slated to take up the post.
The need for further stimulus was compounded by unexpected job losses in December. The Labor Department reported on Friday that non-farm payments fell 140,000 as new lock-in restrictions plagued virus-sensitive businesses, marking the first monthly decline since April.
Political turmoil should continue this week and it remains to be seen when or if the markets will affect it. Democrats backed by some Republicans are moving toward the start of impeachment proceedings in the House of Representatives against President Donald Trump as early as this week to incite the attack mob. The House Rules Committee is expected to encourage impeachment proceedings without committee hearings or votes.
For now the market seems to be overlooking it as Congress was able to confirm the victory of Biden’s election and the Democrats now seem to be in the majority in the Senate seeking another major stimulus. If these events start to delay or delay those incentive plans, traders may start paying more attention to them.
Some on Wall Street are seeing a pullback on the horizon for the market especially after 2020 which was surprisingly strong. The S&P 500 gained 16.3% last year.
“After being bullish for several months, we are definitely becoming more cautious on the stock market at those levels,” Miller Male, chief market strategist at Miller Tabak, said in a note on Sunday. “We believe that most of the rally from the March lows is behind us … and that a correction is likely to begin at some point in the first quarter of this year.”
Last week, 10-year Finance benchmark yields broke above 1% for the first time since a pandemic outbreak in March.
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